Rick Ackerman

A little more than two decades ago, amidst the wild excesses of the dot-com boom, I wrote what turned out to be an epitaph for those heady times in the The San Francisco Examiner. It bore the headline Monsters from the Id Threaten the System, a metaphorical nightmare that I’ll explain shortly. Then as now, vast quantities of money driving stocks to absurd heights seemed practically limitless. ‘Easy Al’ Greenspan was in charge of the Fed, and the loose monetary policies he pursued reflected some of the crackpot ideas he evidently brought with him from Columbia University’s PhD program. A fat lot of good they did him; for on numerous occasions, Greenspan would laughably refer to inflated home prices as "wealth." He would also tout a supposed investment boom at a time when household savings growth was negative. As every freshman economics student knows, investment cannot exceed savings, and we cannot increase investment unless we cut back on current consumption. And yet, here we were, consuming and borrowing like crazy but still somehow "investing" in the future in defiance of immutable economic law. Bread and Circuses It would seem that most economists these days continue to believe fervently in Greenspan’s monetary Rube Goldberg contraption. Still worse, the charlatans at the central bank who keep it lubricated and running somehow command nearly universal respect. This should probably come as no surprise, given all the bread and circuses that money-from-trees has begotten us. Few seem concerned in any event that as stock market valuations have climbed to insane heights, global debt in its many shapes and forms is approaching two quadrillion dollars. Let me type that out for you: $2,000,000,000,000,000! Most of it is swirling around in derivatives markets that are notionally ten times the size of global trade in real goods

Use the 331.87 target shown in the chart to warn of a potentially important top, since another at 382.75 that I'd identified here a week seems far too ambitious with Biden nominally in charge of America.  The point 'A' low is not as distinctive as we should prefer, but it's good enough to imply that bulls are unlikely to simply blow past 331.87, even with the help of nervous-Nellie shorts. Another reason I prefer this target is that it closely coincides with one at 13,555 in the E-Mini Nasdaq that has been on our radar since September. Here's a chart that shows it.  We already hold puts in QQQ, but I'll recommend buying a few more cheap ones when 13,555 is reached. Like the target in QQQ, it looks unlikely to be a pushover. _______ UPDATE (Jan 27, 8:24 p.m. EST): Now wasn't that refreshing! The Cubes shed nearly 3% of their value today after topping at 330.32 on Monday, a hair below my target. As for the E-Mini Nasdaq, it got sacked for a 4.4% loss after cresting a millimeter  (0.6%) above the 13,555 target first drum-rolled here months ago. Let's see if the selloff snowballs into something frightening enough to wipe the smile off the Reddit/Robinhood crowd's face. _______ UPDATE (Jan 28, 9:35 p.m.): The 331.87 target remains unsullied by all the nuttiness, but we'll give it up if the Cubes can close for two consecutive days above it..

We have rally targets in play in numerous vehicles, all of which are near potentially important tops.  The previously identified E-Mini target at 3938.25 (see inset) gives it a little more running room than comparable targets in QQQ, IWM and NQ (although not DIA, which is nicely synced), but the pattern itself looks quite reliable.  For  trading purposes, we can try getting short in each without considering what the others are doing. Realize that the S&Ps are not necessarily going to top simultaneously with the Nasdaq 100 and the Russell. ______ UPDATE (Jan 27, 8:34 p.m. EST): The futures turned sharply lower, although bears will need to string together a few selloff's like today's to earn bragging rights. It's a start, though.

The suspicion grows that the Russell 2000 is at or very near a potentially important top (see inset). If you haven't seen the video I made last week to help you leverage it, click here.  The chart shows IWM to have peaked last week almost precisely at the D target projected from the A2 low in the chart. The sharp pullback from that high would have allowed for partial profit taking on some puts we already held. However, because the week ended with IWM in a short squeeze, it is appropriate to adjust our sights slightly higher. That is the purpose of this tout, with a new D target derived from the lowered point 'A'. The outlook for IWM is firmly corroborated by this long-term chart in the E-Mini Russell, but also by a lesser ABC pattern in RTY of a sort that often works precisely. _______ UPDATE (Jan 27, 8:36 p.m. EST): IWM has gotten hit hard after topping 9 cents above the 217.82 target I'd flagged as a place for a potentially important top to occur. Now let's see if there's enough power behind the selling to muffle the buy-the-dips bozos. _______ UPDATE (Jan 30):  Last week's 6% drop was sufficient to invigorate the puts I'd suggested buying earlier. (Note: I posted a timely video just ahead of the selloff explaining in detail how to put on a bearish butterfly spread in this vehicle.) Cash out half of them if and when their price doubles, but keep the rest for a potential home run. If you need to roll your position to extend its duration, please let me know in the chat room so that I can provide timely guidance. ______ UPDATE (Feb 2, 6:14 p.m.): IWM's snap-back rally has slightly lagged the Nasdaq 100's, but it wouldn't

Gold has been screwing the pooch for five months, vexing bulls and bears alike. The most promising rally over the period was the 200-pointer that occurred between October 30 and January 6. It failed by an inch to exceed an important November peak at 1973, however, casting doubt on a pullback that now threatens to inundate the daily chart. A far larger, bullish structure going back to 2016 remains quite robust, however, and the 1450 print it would take to seriously impair it appears to be out of bears' reach for the foreseeable future. _______ UPDATE (Jan 26, 8:36 p.m. EST): This pattern is my kind of gnarly. Play for a bounce from p=1810.20 with a stop-loss as tight as you can abide. ______ UPDATE (Jan 28, 9:36 p.m.): Today's stupid spasm changed nothing.

Silver's chart differs bullishly from gold's in one subtle respect: the 27% rally from December's $22 low slightly exceeded a technically important 'external' peak. This created an encouraging impulse leg that has survived a pullback so far to 24. The selloff did not generate a 'mechanical' buying signal, however, because the peak of the rally narrowly failed to hit the red line as required. We are therefore left on the sidelines for the time being, rooting for silver while awaiting a better opportunity. It could conceivably come in the form of a 'mechanical' buy on a correction of a rally to around 28. Stay tuned if you're interested. _______ UPDATE (Jan 26, 8:41 p.m. EST): A Hidden Pivot support at 24.73 is equivalent to the one in March Gold that I've suggested bottom-fishing with the tightest stop-loss you can handle (30-min, A=26.73 on 1/8). _______ UPDATE (Jan 27, 8:48 p.m.):  The futures trampolined 75 cents after bottoming a penny-and-a-half below my 24.73 target. If you'd bottom-fished there as I'd suggested, the trade would have worked with a stop-loss as tight as two cents and would have reaped a gain of as much as $3,750 per contract. _______ UPDATE (Jan 28, 9:42 p.m.): Although gold barely merited a yawn today, Silver popped through p=26.21 in this chart with such brio that more upside to at least D=28.39 appears likely over the next 2-3 days.

Since few believe that the current bloodbath in bitcoin will stifle cryptomania, I've hauled out an ambitious chart that extends the bullish imagination above 50,000. Of course, a rally to that number would be a mere pisher for hard-core crypto fans. Many of them are gamers who, it must be admitted, got aboard for chump change two years before most of us had even heard the word blockchain. Their bull-market targets range upwards of $500,000, but here's a little something for you guys to ponder before you risk a downpayment on that lynx-colored Gallardo: the 'Tether problem'.  Tether aside, anyone can see in the chart that bitcoin will probably need to spill more blood to properly correct a leg as insanely steep as the run-up from 10,000 in October to a high earlier this week of 42,000. The so-far low of the nearly 30% correction since is 30,052. However, BRTI, which reflects the best bid/offer in real time across many cryptocurrency markets, would need to fall to 25,948 to reach the 50% threshold, and to 22,166 to hit the 61.8% Fibo.  Ouch!  No recent correction on the lesser charts has come even close to 50%, but this time could be different, since Mr. Market has a way of seeding doubts in even the most rabid bulls when they get too cocky. Whatever happens, if you trade this monster or one of its derivatives, you should stay closely tuned to Rick's Picks, since the 'mechanical' entry set-ups we use to profit from the markets are well suited to harnessing even the most violent steeds. _______ UPDATE (Jan 23): BRTI has retraced a bit more of December's rally as anticipated and would now trigger a theoretical 'buy' signal if this bounce touches the green line. The 'D' target associated with x is

Those who write about such things have attributed virtually every stock-market rally since March 23 to 'vaccine hopes'.  They have overworked and over-hyped this phrase with no sense of irony or awareness; for it is not so much 'hope' that has powered stocks to insane levels, but monetary stimulus pumped liked steroids into a beast that was rabid to begin with.  This is the kind of 'hope' that T-Rex must have felt when it cornered a chubby dinosaur half its size, or that a drug addict might feel after springing the lock on a cartel storage locker filled with white powder.  'Hopeful' is far too modest and gentle an adjective to explain the mass psychosis that has gripped Wall Street over the last ten months. When Bad News Is Bad News Now that a vaccine has finally arrived, however, it is fair to ask what will keep speculators' hopes inflated to infinity.  Under the best imaginable circumstances, it will probably be at least two years before we can look back on the pandemic and marvel at how we finally beat it.  We'll know this has happened when salad bars re-open, subway cars are packed with commuters, and nursing homes welcome visitors with open arms. Does anyone on Wall Street actually believe this is how things are about to play out? More realistically, the stories we will be hearing -- about vaccines that have never been tested on animals or even on significant numbers of humans -- will be scary ones: injection-related deaths, bizarre symptoms, transmission of Covid by the inoculated and the asymptomatic, sterility, vaccine-resistant mutations, inscrutable infection spikes in places locked down like fortresses.  At that point, such hopes as remain will be vested in the central bank and its perceived willingness to step up interventions on bad news.

Gold futures seem poised to head at least moderately lower this week after failing to exceed anything significant on the last rally.  The pattern shown projects to a 1751.60 Hidden Pivot support. That would negate the point 'C' low of a far bigger, bullish pattern projecting to as high as 2166.90.  December's failed rally did not quite reach the 1967.10 midpoint resistance, telegraphing the weakness that has followed. In a headline last week, I told investors not to give up on gold.  That is still my advice, although we cannot rule out the possibility that the weakness will eventually test March's watershed low at 1461.70. I seriously doubt it will get that bad, but in the meantime, absent an impulsive rally exceeding November's 1973.40 peak, a turnaround does not appear to be in the cards. ______ UPDATE (Jan 19, 5:35): How unimpressive was today's rally?  Unimpressive enough, actually, to trigger a so-so 'mechanical' short at 1835.90, stop 1864.10.  We shall see. ______ UPDATE (Jan 20, 7:40 p.m.):  The rally stopped out the point 'C' high of a bearish pattern, but I still don't trust it. I've set my snooze alarm at 1973.40, a tick above a key 'external' peak made on 11/9. If February gold prints there, bulls will gain some credibility and the futures will be on their way to a 2166.90 target I haven't mentioned in a while.